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H.R. 5749 — what changed

Options Markets Stability Act

From Reported in House to Engrossed in House. 2 sections amended between Reported in House and Engrossed in House.

Sec. 2 Rulemaking

changed Within 180 days of the date of enactment of this Act, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency shall, jointly, issue a proposed rule, and finalize such rule within 360 days of the date of enactment of this Act, to adopt a methodology for calculating the counterparty credit risk exposure, at default, of a depository institution, depository institution holding company, or affiliate thereof to a client arising from a guarantee provided by the depository institution, depository institution holding company, or affiliate thereof to a central counterparty in respect of the client's performance under a an exchange-listed derivative contract cleared through that central counterparty pursuant to the risk-based and leverage-based capital rules applicable to depository institutions and depository institution holding companies under parts 3, 217, and 324 of title 12, Code of Federal Regulations. In issuing such rule, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency shall consider—

(1)
the availability of liquidity provided by market makers during times of high volatility in the capital markets;
(2)
the spread between the bid and the quote offered by market makers;
(3)
the preference for clearing through central counterparties;
(4)
the safety and soundness of the financial system and financial stability, including the benefits of central clearing;
(5)
changed the safety and soundness of individual institutions that may centrally clear exchange-listed derivatives or options on behalf of a client, including concentration of market share;
(6)
the economic value of delta weighting a counterparty’s position and netting of a counterparty’s position;
(7)
the inherent risk of the positions;
(8)
changed barriers to entry for depository institutions, depository institution holding companies, affiliates thereof, and entities not affiliated with a depository institution or depository institution holding company to centrally clear exchange-listed derivatives or options on behalf of market makers;
(9)
the impact any changes may have on the broader capital regime and aggregate capital in the system; and
(10)
changed consideration of other potential factors that impact market making in the exchange-listed options market, including changes in market structure.

Sec. 3 Report to Congress

changed At the end of the 5-year period beginning on the date the final rule is issued under section 1, 2, the Board of Governors of the Federal Reserve System shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report detailing the impact of the final rule during such period on the factors described under paragraphs (1) through (10) of section 2.